Minnesota: The story behind the score

By Ahndi Fridell

Minnesota has always been an “above-average” state, in the words of celebrated public radio host Garrison Keillor. Census figures show a state with a median household income of $57,243 compared to $51,914 for the rest of the country. A total of 91 percent of the population of 5.3 million has graduated high school and 10 percent of its citizens have a graduate degree.

Minnesotans have high civic participation rates and demand accountability from their elected officials. “Here is a state in which government has traditionally been seen as an instrument for achieving public good, not an oppressive or patronage-ridden mechanism,” said Neal Peirce and Jerry Hagstrom in The Book of America.

And Minnesotans generally take a dim view of corruption by public officials, viewing their state as free of the corruption found in other states. But it turns out that rosy view is somewhat deceptive. Indeed, Minnesota’s 69 score ranks the state 25th out of the 50 states and earns it a D+ grade in the State Integrity Investigation compiled by the Center for Public Integrity, Global Integrity and Public Radio International.

Part of the reason for such a surprisingly low score appears to be that Minnesota has not had a rich history of political corruption requiring additional reform legislation. So, as other states have reformed their laws over the past decade to combat corruption by public officials, Minnesota has not kept pace with similar legislation.

“Minnesota has had a long tradition of fighting corruption, but the days of Tammany Hall are a century past us,” said Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “The real battle today is over an avalanche of money into politics and the disclosure requirements in Minnesota are just no longer sufficient.”

High-profile cases of corruption in the state are relatively rare, and modestly low grade as measured against scandals elsewhere. For example, in the early-1990s there was the “Phonegate” scandal by Democratic lawmakers who used state-funded toll-free phone access codes for personal use. And there were some recent campaign finance violations by the Republican Party of Minnesota.

State government shutdown limits legislative openness

On the last day of June 2011, under Minnesota’s marble Capitol Rotunda, people holding signs and making speeches protested a looming government shutdown. But, most of the Capitol press corps were not listening. They were located one floor up, sitting in a quieter wing outside of the Governor’s office in folding campfire chairs, talking on cell phones and working on laptops. They were waiting to hear whether the Republican leadership and the Democratic Governor were going to compromise on a budget deal on the final day before state government functions were required to shut down.

Just hours before the midnight deadline, the two sides could not come to agreement and Gov. Mark Dayton refused to call a special session. On July 1st, 19,000 state employees were laid off, affecting licensing and regulatory services, highway construction and state parks and campgrounds.

Government observers say decision-making in the state is usually done in public and citizens have ample opportunity to have their voices heard. But last summer’s state government shutdown and budget deal provided a troubling example of how legislation gets passed with no public input at the end of a legislative session.

Weeks of closed-door negotiations between Republican legislative leaders and the Democratic-Farmer-Labor (DFL) Party led by Governor Dayton preceded the budget compromise on July 19th. Twenty days after the shutdown began, a special legislative session was called and the budget bills were signed into law.

By the time the government was open for business again, Minnesota’s citizens were only just beginning to discover the details contained in those budget agreements. In one news story after the budget deal concluded, Minnesota Public Radio’s Madeleine Baran reported, “Advocates for the disabled were surprised to find new policies for group homes included in the state budget bill passed last week — policies they said were never publicly discussed or debated by lawmakers, state officials, or the governor.” Reporters, legislators, advocates and critics point to this end-of-session, closed-door negotiation practice as a major flaw in state government accountability.

Campaign finance changes require more oversight

Last summer, the Republican Party of Minnesota agreed to pay a $170,000 fine for a series of federal campaign finance violations between 2006 and 2008. According to the agreement, the Party failed to properly report debts on its federal campaign finance reports and inappropriately transferred money between state and federal spending accounts. The GOP is currently $2 million in debt and observers say more such violations could be revealed in the wake of the party chair’s resignation last December 2011 over mismanagement of the Party’s finances. In terms of political scandals, it may not be a whopper, but critics say that it reflects a general lack of oversight of campaign finances.

Mike Dean, executive director of Common Cause Minnesota, believes Minnesota has largely avoided the political scandals that exist elsewhere because of its campaign finance system. In a study by the Campaign Finance Institute, the state has the highest percentage in the country, 45 percent, of donors contributing $100 or less to political campaigns; the national average is roughly 9 percent.

But Dean warns that with the U.S Supreme Court ruling in Citizens United v FEC, much more money is now able to flow into elections from previously banned contributors and needs to be closely monitored. In 2010, Minnesota legislators passed a disclosure law in response to the Supreme Court ruling. The disclosures demonstrated, for the first time in state history, that corporations donated money to try to influence state elections through political action committees. According to Dean, the disclosure legislation is not sufficient. “There are loopholes in the law for indirect contributions for independent expenditures with no spending limits or reporting requirements.”

Underfunding the watchdog

Minnesota ranked 40th out of 50 states and received an “F” grade from the Center for Public Integrity in its 2009 ranking of financial disclosure rules for state legislators. The state received low marks for the lack of spousal and client information by state lawmakers and constitutional officers. What may be even more worrisome is that state law does not require auditing of the economic disclosure statements. So, when it comes to financial disclosure, Minnesotans have to trust that politicians are being honest about their financial interests.

Minnesota’s Campaign Finance and Public Disclosure Board has the authority to audit economic disclosure forms as well as campaign finance and expenditure reports if it chooses, but rarely does so. The board is underfunded by the legislature and does not have the resources to regularly conduct audits, according to the board’s executive director, Gary Goldsmith. In some states, auditors are funded through fees paid by campaigns, but Minnesota’s oversight mechanism is funded through the state’s general fund and is subject to the economy as well as the political interests of legislators.

Common Cause Director Dean said the board checks for errors but stated that illegal contributions occur: “Corporate donations to political parties and candidates are banned, but there have been violations of those contributions with no consequences. ” Without enforcement, Minnesota’s campaign finance system is, de facto, one of self-reporting.

Lobbyists’ Disclosure Lacks Timeliness and Essential Information

The Campaign Finance and Public Disclosure Board is also responsible for oversight of lobbyists’ registrations. But a key problem in Minnesota, according to people who regularly examine the information, is that lobbyists’ disclosure requirements result in incomplete information and it is often too little, too late. Lobbyists must register with the state when they become a lobbyist or if a new firm or association engages them. Lobbyists are not required to report whom they are lobbying or what bills they are lobbying for or against. They simply have to give a general description of the subject or subjects on which they expect to lobby. Since lobbyists are only required to register initially, those subjects could change drastically over the course of their employment.

Capitol reporter Bill Salisbury of the Pioneer Press said of the reports, “It is hard to know who is lobbying and how much they are spending.” In contrast to other states which mandate quarterly reports, lobbyist reports are required only twice per year in Minnesota. The June report, at the end of the session, means that any lobbying done in a special session may not be reported until the following year, and in many years, after a political election. Lobbyist reports also do not include the amount of income received for lobbying, although this information can be found by cross-checking lobbyist reports with Principal (employer) reports.

Strong ethics rules…without consequences

While the state has had a fairly strict ethics law regarding gifts since 1994, there is no enforcement agency and no fines for violating the laws. Statute 10A.071, , otherwise known as the “Gift Ban”, prohibits state workers, including legislators and judges, from accepting gifts, including food or beverages except in limited circumstances. There are no penalties, however, in the statute for violating this law. The law has proved to be unpopular among lobbyists and some legislators. If legislators or lobbyists are violating the law, it is the responsibility of state prosecutors to charge them, and so far, that has not happened. Dominic Sposeto, Director of Governmental Affairs for MN Independent Insurance Agents and Brokers said, “The ban is as effective as you can get. People don’t do anything. It’s not good.” Generally, political observers say the ban has been effective in reducing the appearance of influencing politicians, but Professor Larry Jacobs said, “It is kind of like an honor system among a group of people who are not necessarily those who voters trust the most.”

Time for judicial reform?

According to Professor Jacobs, Minnesota has one of the most widely respected judiciaries in the nation. Historically, Minnesota judges could not raise campaign funds directly, seek political party endorsement, or publicly express views on topics that might come before them in court. However, since the 2002 U.S. Supreme Court decision in Republican Party of Minnesota v. White that allowed candidates for judicial office to announce their views on legal and political issues, the election process for judges has become more political and attracted more cash.

Professor Jacobs warned that “Minnesota and a number of other states are facing the approaching Death Star of a politicized judiciary. It is only a matter of time until we have judges running for office and getting campaign contributions for their rulings. So instead of sitting in front of a judge with confidence that you will be treated impartially and fairly, whether you’re in a union or business or some other area, we’re going to be facing judges who run for office on a campaign platform with campaign contributions from big interests in our society. It’s really a frightening future.”

Other problematic areas in state law include an exemption for judges from the requirement to file statements of economic interest, otherwise known as asset disclosure forms. As a result, the public is not aware of potential financial conflicts of interest. Additionally, the governor appoints most judges, but there is no process in place to evaluate the performance of judges who are up for retention or reelection. These issues and a lack of accountability appear to make the judiciary ripe for reform efforts in the state.

Bright spots

One of the bright spots in the state is the Office of the Legislative Auditor. The Office is widely seen as non-partisan, aggressive, and even-handed in its approach to auditing and evaluating state agencies and programs. In 1973, a private study group recommended creation of an office in the legislative branch comparable to the Government Accountability Office (GAO), a non-partisan governmental “watchdog” at the national level.

With its authority to investigate alleged misuse of public money, the Legislative Auditor has subpoena power and the ability to protect the identity of whistleblowers. If there are suspicions of corruption in Minnesota’s government, it is highly likely that the Legislative Auditor will uncover it first.

Minnesota also has a robust open records law, called the Government Data Practices Act. It attempts to balance privacy interests with a presumption of access to information, and is recognized as model legislation. The Data Practices Act provides average citizens access to state government records, communication and other data in a timely manner. Problems with the law primarily have to do with its application by public employees who are not familiar with the requirements of the law. Another criticism is that the legislature exempted itself from the requirements of the legislation, although audio and video of House and Senate sessions as well as many committee hearings are available to the public and can be found archived online and in the legislative reference library.

While research shows that Minnesota could strengthen its oversight and accountability laws and policies, the state’s citizens will have to decide how willing they are to trust their public officials and institutions to maintain the state’s culture of anti-corruption. The potential for corruption may exist, but a historical lack of large-scale political scandals means that such legislation may not be a priority. Enacting new legislation might help the state maintain its good government reputation.